[Search for users] [Overall Top Noters] [List of all Conferences] [Download this site]

Conference nyoss1::market_investing

Title:Market Investing
Moderator:2155::michaud
Created:Thu Jan 23 1992
Last Modified:Thu Jun 05 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:1060
Total number of notes:10477

904.0. "Sudden drop in price of bonds?" by MIMS::BEKELE_D (When indoubt THINK!) Tue Aug 15 1995 00:35

    This is probably a stupid question...just a week (or what
    appears to be a week) ago the long bond was well over $108.
    I watched NBR tonight and it is now below par.  What 
    happened?  What does a sudden drop (if it is that) such as 
    this tell us?
    
    Thanks!
    Dan
T.RTitleUserPersonal
Name		DateLines
904.1Different bond this weekEVMS::HALLYBFish have no concept of fireTue Aug 15 1995 08:1410
    The long bond you saw priced at 108 has been replaced with the newest
    series, the ones auctioned off last week. They have different coupon
    payments: the new ones pay less than the old. The new ones therefore
    have a lower face value. When issued (i.e., last week) their face value
    is always $100.
    
    Which is why you should look at the yield to maturity which hasn't
    changed very much in the last week.
    
      John
904.2As I said, it was a stupid question!MIMS::BEKELE_DWhen indoubt THINK!Tue Aug 15 1995 20:233
    Ooops! forgot about the quarterly refundings.
    
    Thanks!